In November 2018, CV sales volume increased at a 12-month low of 6% yoy due to a sales volume drop of 11% yoy in MHCVs, though the impact was partly offset by a modest 17% yoy growth in LCVs. Delayed purchases owing to weak customer sentiment, rising borrowing costs and increased fuel prices translated into modest sales growth. Sales were hit by lower credit availability owing to a liquidity crunch in the NBFC sector, which is the main source of funding for CVs. In addition to this, sales were affected by the new axle load norms that have increased the maximum load carrying capacity of existing vehicles. However, tipper segments and LCVs continued to record modest growth, backed by a rise in construction spending, steady demand from the rural economy and consumption-driven and e-commerce sectors.
After reporting a marginal improvement in the earlier month, PV sales volume declined on a yoy basis due to weak buyer sentiments, higher insurance premiums and an increase in fuel prices as well as interest costs. Furthermore, the lending environment is under pressure, and liquidity remains tight. In November 2018, sales volume of both cars and UVs decreased by 1% yoy and 10% yoy, respectively. Sales were impacted by higher inventory at the dealership level owing to weak sales during the festive season.
In November 2018, 2W sales volume grew at a modest 7% yoy, well below the growth of 17% yoy seen last month. Sales were constrained by higher insurance premiums and the recently introduced restriction in West Bengal (a significant market for 2Ws) that permits the sale of 2Ws to only driving licence holders. Sales continued to be impacted by weak customer sentiment, rising fuel cost and borrowing costs. However, steady rural demand, higher disposable income and increasing middle class population continued to support sales growth. During the month, motorcycle sales grew at 9% yoy, while scooter sales grew at a mere 3% yoy.
